News Guide Africa

Tag: macroeconomic stability

  • Ghana’s banking sector surges with GH¢465bn asset base

    Ghana’s banking sector surges with GH¢465bn asset base

    By Adnan Adams Mohammed

    Following a period of intense restructuring and economic turbulence, Ghana’s banking sector has emerged with a newfound resilience.

    New data from the Bank of Ghana (BoG) reveals a significant expansion in the industry’s footprint, with total assets surging to GH¢465 billion, signaling that the “cleanup” years are finally giving way to a period of robust growth.

    The recovery is being attributed to a combination of strict fiscal discipline, improved macroeconomic stability, and a gradual return of credit appetite within the industrial sector.

    The asset surge

    The BoG’s latest Banking Sector Report paints a picture of a financial system that has successfully navigated the choppy waters of debt restructuring. The GH¢465 billion asset milestone represents a double-digit growth rate compared to the previous year, driven largely by an increase in deposits and a strategic shift in investment portfolios.

    Industry analysts suggest that this liquidity provides the necessary “firepower” for banks to support the government’s recovery agenda. However, the central bank cautioned that while the balance sheets are larger, the focus must remain on asset quality to prevent a rise in non-performing loans (NPLs).

    Fiscal discipline: The foundation of strength

    The Managing Director of the Agricultural Development Bank (ADB) has linked this sectoral strength directly to the government’s recent economic reforms. Speaking on the sidelines of an industry gala, he noted that the “bitter pill” of fiscal discipline is finally yielding a sweeter result for the financial markets.

    “Fiscal discipline has made the banking sector and Ghana’s economy stronger,” the ADB MD stated. He argued that the government’s commitment to staying within its budgetary limits has reduced the risk profile of the state, which in turn stabilizes the banks that hold significant government paper. “We are seeing a more predictable environment where banks can plan for long-term growth rather than just managing daily liquidity crises.”

    The return of industrial credit

    Perhaps the most encouraging sign for the “real economy” is the recovery of credit growth. After months of being locked out of affordable financing due to high interest rates and low bank confidence, Ghana’s industrial sector is beginning to see a thaw in the lending freeze.

    A recent market report indicates that business confidence is improving as banks resume lending to manufacturing and construction firms. “Credit growth is showing a recovery in Ghana’s industrial sector,” the report highlighted, noting that as inflation cools, banks are becoming more willing to take on the risk of private-sector lending.

    “For the first time in nearly two years, we are seeing banks proactively looking for viable projects to fund in the industrial space,” noted a representative from the Association of Ghana Industries (AGI). “This is a clear signal that the financial system is no longer just surviving; it is starting to facilitate production.”

    Challenges on the horizon

    Despite the positive trajectory, the sector is not without its hurdles. While assets have surged, the “mismatch” between the central bank’s reference rate and commercial lending rates remains a point of contention for many SMEs. Furthermore, the memory of the Domestic Debt Exchange Programme (DDEP) remains fresh, leaving some retail depositors still cautious about long-term investment products.

    The government maintains that the current trajectory is sustainable. By maintaining fiscal discipline and encouraging digitalization within the banking halls, the Ministry of Finance aims to make the GH¢465 billion asset base a springboard for wider economic prosperity.

    As the second half of 2026 approaches, the banking sector stands as the most visible evidence of Ghana’s “Economic Turnaround,” moving from a state of repair to a state of expansion.

    Snapshot: Ghana’s Banking Recovery (2026)

    ● Total Sector Assets: GH¢465 Billion

    ● Key Driver: Improved fiscal discipline and deposit growth.

    ● Sector Outlook: Improving confidence in industrial lending.

    ● Primary Risk: Managing Non-Performing Loans (NPLs) as credit expands.

     

     

  • Jobless recovery: Ghana’s resurgent economy is leaving workers behind

    Jobless recovery: Ghana’s resurgent economy is leaving workers behind

    By Adnan Adams Mohammed

    Ghana’s macroeconomic indicators are painting a picture of a remarkable comeback: inflation is cooling, GDP growth is beating expectations, and the Cedi has found its footing. Yet, for the thousands of young graduates pounding the pavement in Accra and Kumasi, the “economic miracle” remains invisible.

    A string of new reports and expert analyses suggest that Ghana is grappling with a “jobless recovery,” where the wealth being generated is concentrated in sectors that simply do not hire many people.

    A sharp decline in job adverts

    The most recent labor market report has sent a chill through the workforce. Despite the much-touted economic stability, the number of formal job advertisements has actually fallen in the first quarter of 2026. This weakening in hiring activity suggests that businesses, while more stable, remain hesitant to expand their payrolls.

    “Hiring weakens as job adverts fall despite economic stability,” the report noted, pointing to a paradox where firms are breathing easier financially but are not yet confident enough to recruit. Many companies are reportedly focusing on “operational efficiency”, doing more with fewer people, rather than scaling up human capital.

    “The weakest link”

    Prominent financial analyst and Executive Director of Dalex Finance, Joe Jackson, has been vocal about this disconnect. He argues that while the government deserves credit for stabilizing the ship, the “social contract” of providing livelihoods is being neglected.

    “Job creation remains the weakest link in this economic recovery,” Jackson stated. He warned that a recovery that doesn’t put money into the pockets of the youth is politically and socially unsustainable. “We can talk about macro stability all day, but if the ordinary Ghanaian cannot find a job to sustain their family, the numbers on the spreadsheet mean nothing.”

    The sectoral mismatch: Growth without people

    Why is a strong rebound failing to translate into employment? Yaw Appiah Lartey, a Partner at Deloitte Ghana, points to the nature of the growth itself. Ghana’s current GDP expansion is being driven by “capital-intensive” sectors rather than “labor-intensive” ones.

    “Ghana’s economic growth is not creating jobs despite a strong rebound because of where that growth is coming from,” Lartey explained. He noted that the sectors leading the charge, Extractives (Oil and Gold), Telecommunications, and Financial Services, require massive technology and capital but relatively few workers. In contrast, Agriculture and Manufacturing, which have the potential to employ millions, continue to lag behind.

    Structural bottlenecks and business hesitation

    The private sector, often called the “engine of growth,” is currently idling. Mark Badu-Aboagye, CEO of the Ghana National Chamber of Commerce and Industry (GNCCI), argues that “structural bottlenecks” are blunting the impact of the macro gains.

    “The transmission mechanism from the macro to the micro is broken,” Badu-Aboagye said. He highlighted that while inflation is down, the cost of electricity and high interest rates still make it nearly impossible for a local manufacturer to hire more staff. “Businesses want to produce and people want to buy, but when the structural costs remain high, the first thing a company cuts is its recruitment drive.”

    The human cost of “efficiency”

    For the youth, the situation is increasingly desperate. Many are turning to the “gig economy” or low-productivity informal trade just to survive. The GNCCI CEO warned that the Bank of Ghana’s focus on mopping up liquidity to fight inflation has inadvertently lowered the “purchasing power of the ordinary person,” further depressing demand for the very goods and services that would create jobs.

    A call for strategic re-alignment

    As the 2026 fiscal year progresses, the consensus among experts is that the government must move beyond “stabilization” and into “industrial stimulation.”

    “We need a deliberate policy shift that incentivizes hiring,” Joe Jackson urged. “Stability was Step A. Step B must be about jobs, or we risk a generation of disillusioned youth who feel the economy has no place for them.”

    With the “Mahama at 16 Months” milestone now reached, the administration faces a critical test: can it turn these “macro wins” into a “micro reality” for the Ghanaian worker?